Comerica: Auto Affordability Almost at Its Best
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DALLAS — The purchase of an average-priced new vehicle took only slightly more median income than it did in the prior quarter, according to Comerica Bank's Auto Affordability Index.
More specifically, it took 22.1 weeks of median family income in the second quarter, the index found.
This reading is up 0.3 weeks, thereby representing a slight deterioration in affordability compared to the prior quarter, officials indicated.
Median family income was essentially unchanged in the second quarter.
The total cost of buying and financing a new car rose, however, due entirely to the fact that consumers chose to buy more expensive cars on average, the company discovered.
The average price of a light vehicle purchased in the second quarter rose by $300 to $26,300.
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"While consumers opted to buy more expensive vehicles last quarter, a sharp drop in financing costs held down our affordability index," explained Dana Johnson, chief economist at Comerica Bank.
"Reflecting the partial normalization of credit markets, the average rate paid on a car loan at finance companies was only 3.45 percent last quarter, the lowest level seen in five years. In the current quarter, our affordability index very possibly will reach a new best reflecting the Cash for Clunkers program that is now in place," he added.